Wealth Blog

Finance Blogs » Wealth » Is your cash safe?

Is your cash safe?

By Judy Martel · Bankrate.com
Friday, May 21, 2010
Posted: 4 pm ET

If you've been squirreling cash in your bank, the latest numbers from the FDIC quarterly report might be troubling.

The list of the FDIC's "problem banks" numbered 775 in the first quarter of this year, a spike over last year, when 702 banks made the list for all of 2009. So far this year, regulators have shuttered 72 banks, more than twice as many as this time last year.

So what does this mean for those tucking savings in the bank, especially as they get closer to retirement and want ready access to cash?

As I've said before in this blog, the quickest path to wealth since the recession appears to have been in the stock market, despite the volatility. Real estate is still in the doldrums, and rates on CDs and money market accounts are stuck in limbo.

But if you've been relegating more of your money to cash, either because you discovered your risk tolerance wasn't what you thought after the stock market free fall, or you need a stable source of funds, the FDIC numbers might concern you. One place to look for reassurance is Bankrate's Safe and Sound ratings, which will give you an indication of your bank's safety.

But even if your bank does fail, your accounts are not at risk. The FDIC insures individual accounts up to $250,000. If the FDIC can't locate a buyer for the bank and has to become the receiver, the agency usually closes the bank on a Friday and takes the weekend to balance the books. Consumers often don't notice much disruption in service.

And finally, the FDIC report also pointed to some good news in the form of strong financials. Banks reported first-quarter profits of $18 billion, more than three times the first quarter of last year, and big banks saw the largest year-over-year increase in earnings.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
2 Comments
cynthia
May 25, 2010 at 9:19 pm

The rich is richer and us poor suckers work ourselves silly just to pay the rent and light bill meanwhile I don't trust anything to do with a bank but time for the hole in the wall routine again the great depression in my house hold just began.

real
May 25, 2010 at 11:59 am

This reckless concentration of wealth/capital (the rich getting richer) is the single greatest underlying cause for this global economic crisis. Otherwise, there never would have been such a market for sub-prime or a global credit crunch. In the US, the richest 1% currently hold about 1/2 of all wealth/capital. Thats an all-time high. Globally, they hold over 40%. Another all-time high. Obama's economic policies will buy us some time but thats all. The newly printed currency will become concentrated as well. Mark my words. Some FDIC accounts will be lost within 5 years. Greed kills.